We still continue in a period of unbounded prosperity. This prosperity
is not the creature of law, but undoubtedly the laws under which we work
have been instrumental in creating the conditions which made it possible,
and by unwise legislation it would be easy enough to destroy it. There
will undoubtedly be periods of depression. The wave will recede; but the
tide will advance. This Nation is seated on a continent flanked by two
great oceans. It is composed of men the descendants of pioneers, or, in
a sense, pioneers themselves; of men winnowed out from among the nations
of the Old World by the energy, boldness, and love of adventure found in
their own eager hearts. Such a Nation, so placed, will surely wrest success
from fortune.

As a people we have played a large part in the world, and we are bent
upon making our future even larger than the past. In particular, the events
of the last four years have definitely decided that, for woe or for weal,
our place must be great among the nations. We may either fall greatly or
succeed greatly; but we can not avoid the endeavor from which either great
failure or great success must come. Even if we would, we can not play a
small part. If we should try, all that would follow would be that we should
play a large part ignobly and shamefully.

But our people, the sons of the men of the Civil War, the sons of the
men who had iron in their blood, rejoice in the present and face the future
high of heart and resolute of will. Ours is not the creed of the weakling
and the coward; ours is the gospel of hope and of triumphant endeavor.
We do not shrink from the struggle before us. There are many problems for
us to face at the outset of the twentieth century--grave problems abroad
and still graver at home; but we know that we can solve them and solve
them well, provided only that we bring to the solution the qualities of
head and heart which were shown by the men who, in the days of Washington,
rounded this Government, and, in the days of Lincoln, preserved it.

No country has ever occupied a higher plane of material well-being than
ours at the present moment. This well-being is due to no sudden or accidental
causes, but to the play of the economic forces in this country for over
a century; to our laws, our sustained and continuous policies; above all,
to the high individual average of our citizenship. Great fortunes have
been won by those who have taken the lead in this phenomenal industrial
development, and most of these fortunes have been won not by doing evil,
but as an incident to action which has benefited the community as a whole.
Never before has material well-being been so widely diffused among our
people. Great fortunes have been accumulated, and yet in the aggregate
these fortunes are small Indeed when compared to the wealth of the people
as a whole. The plain people are better off than they have ever been before.
The insurance companies, which are practically mutual benefit societies--especially
helpful to men of moderate means--represent accumulations of capital which
are among the largest in this country. There are more deposits in the savings
banks, more owners of farms, more well-paid wage-workers in this country
now than ever before in our history. Of course, when the conditions have
favored the growth of so much that was good, they have also favored somewhat
the growth of what was evil. It is eminently necessary that we should endeavor
to cut out this evil, but let us keep a due sense of proportion; let us
not in fixing our gaze upon the lesser evil forget the greater good. The
evils are real and some of them are menacing, but they are the outgrowth,
not of misery or decadence, but of prosperity--of the progress of our gigantic
industrial development. This industrial development must not be checked,
but side by side with it should go such progressive regulation as will
diminish the evils. We should fail in our duty if we did not try to remedy
the evils, but we shall succeed only if we proceed patiently, with practical
common sense as well as resolution, separating the good from the bad and
holding on to the former while endeavoring to get rid of the latter.

In my Message to the present Congress at its first session I discussed
at length the question of the regulation of those big corporations commonly
doing an interstate business, often with some tendency to monopoly, which
are popularly known as trusts. The experience of the past year has emphasized,
in my opinion, the desirability of the steps I then proposed. A fundamental
requisite of social efficiency is a high standard of individual energy
and excellence; but this is in no wise inconsistent with power to act in
combination for aims which can not so well be achieved by the individual
acting alone. A fundamental base of civilization is the inviolability of
property; but this is in no wise inconsistent with the right of society
to regulate the exercise of the artificial powers which it confers upon
the owners of property, under the name of corporate franchises, in such
a way as to prevent the misuse of these powers. Corporations, and especially
combinations of corporations, should be managed under public regulation.
Experience has shown that under our system of government the necessary
supervision can not be obtained by State action. It must therefore be achieved
by national action. Our aim is not to do away with corporations; on the
contrary, these big aggregations are an inevitable development of modern
industrialism, and the effort to destroy them would be futile unless accomplished
in ways that would work the utmost mischief to the entire body politic.
We can do nothing of good in the way of regulating and supervising these
corporations until we fix clearly in our minds that we are not attacking
the corporations, but endeavoring to do away with any evil in them. We
are not hostile to them; we are merely determined that they shall be so
handled as to subserve the public good. We draw the line against misconduct,
not against wealth. The capitalist who, alone or in conjunction with his
fellows, performs some great industrial feat by which he wins money is
a welldoer, not a wrongdoer, provided only he works in proper and legitimate
lines. We wish to favor such a man when he does well. We wish to supervise
and control his actions only to prevent him from doing ill. Publicity can
do no harm to the honest corporation; and we need not be over tender about
sparing the dishonest corporation.

In curbing and regulating the combinations of capital which are, or
may become, injurious to the public we must be careful not to stop the
great enterprises which have legitimately reduced the cost of production,
not to abandon the place which our country has won in the leadership of
the international industrial world, not to strike down wealth with the
result of closing factories and mines, of turning the wage-worker idle
in the streets and leaving the farmer without a market for what he grows.
Insistence upon the impossible means delay in achieving the possible, exactly
as, on the other hand, the stubborn defense alike of what is good and what
is bad in the existing system, the resolute effort to obstruct any attempt
at betterment, betrays blindness to the historic truth that wise evolution
is the sure safeguard against revolution.

No more important subject can come before the Congress than this of
the regulation of interstate business. This country can not afford to sit
supine on the plea that under our peculiar system of government we are
helpless in the presence of the new conditions, and unable to grapple with
them or to cut out whatever of evil has arisen in connection with them.
The power of the Congress to regulate interstate commerce is an absolute
and unqualified grant, and without limitations other than those prescribed
by the Constitution. The Congress has constitutional authority to make
all laws necessary and proper for executing this power, and I am satisfied
that this power has not been exhausted by any legislation now on the statute
books. It is evident, therefore, that evils restrictive of commercial freedom
and entailing restraint upon national commerce fall within the regulative
power of the Congress, and that a wise and reasonable law would be a necessary
and proper exercise of Congressional authority to the end that such evils
should be eradicated.

I believe that monopolies, unjust discriminations, which prevent or
cripple competition, fraudulent overcapitalization, and other evils in
trust organizations and practices which injuriously affect interstate trade
can be prevented under the power of the Congress to "regulate commerce
with foreign nations and among the several States" through regulations
and requirements operating directly upon such commerce, the instrumentalities
thereof, and those engaged therein.

I earnestly recommend this subject to the consideration of the Congress
with a view to the passage of a law reasonable in its provisions and effective
in its operations, upon which the questions can be finally adjudicated
that now raise doubts as to the necessity of constitutional amendment.
If it prove impossible to accomplish the purposes above set forth by such
a law, then, assuredly, we should not shrink from amending the Constitution
so as to secure beyond peradventure the power sought.

The Congress has not heretofore made any appropriation for the better
enforcement of the antitrust law as it now stands. Very much has been done
by the Department of Justice in securing the enforcement of this law, but
much more could be done if the Congress would make a special appropriation
for this purpose, to be expended under the direction of the Attorney-General.

One proposition advocated has been the reduction of the tariff as a
means of reaching the evils of the trusts which fall within the category
I have described. Not merely would this be wholly ineffective, but the
diversion of our efforts in such a direction would mean the abandonment
of all intelligent attempt to do away with these evils. Many of the largest
corporations, many of those which should certainly be included in any proper
scheme of regulation, would not be affected in the slightest degree by
a change in the tariff, save as such change interfered with the general
prosperity of the country. The only relation of the tariff to big corporations
as a whole is that the tariff makes manufactures profitable, and the tariff
remedy proposed would be in effect simply to make manufactures unprofitable.
To remove the tariff as a punitive measure directed against trusts would
inevitably result in ruin to the weaker competitors who are struggling
against them. Our aim should be not by unwise tariff changes to give foreign
products the advantage over domestic products, but by proper regulation
to give domestic competition a fair chance; and this end can not be reached
by any tariff changes which would affect unfavorably all domestic competitors,
good and bad alike. The question of regulation of the trusts stands apart
from the question of tariff revision.

Stability of economic policy must always be the prime economic need
of this country. This stability should not be fossilization. The country
has acquiesced in the wisdom of the protective-tariff principle. It is
exceedingly undesirable that this system should be destroyed or that there
should be violent and radical changes therein. Our past experience shows
that great prosperity in this country has always come under a protective
tariff; and that the country can not prosper under fitful tariff changes
at short intervals. Moreover, if the tariff laws as a whole work well,
and if business has prospered under them and is prospering, it is better
to endure for a time slight inconveniences and inequalities in some schedules
than to upset business by too quick and too radical changes. It is most
earnestly to be wished that we could treat the tariff from the standpoint
solely of our business needs. It is, perhaps, too much to hope that partisanship
may be entirely excluded from consideration of the subject, but at least
it can be made secondary to the business interests of the country--that
is, to the interests of our people as a whole. Unquestionably these business
interests will best be served if together with fixity of principle as regards
the tariff we combine a system which will permit us from time to time to
make the necessary reapplication of the principle to the shifting national
needs. We must take scrupulous care that the reapplication shall be made
in such a way that it will not amount to a dislocation of our system, the
mere threat of which (not to speak of the performance) would produce paralysis
in the business energies of the community. The first consideration in making
these changes would, of course, be to preserve the principle which underlies
our whole tariff system--that is, the principle of putting American business
interests at least on a full equality with interests abroad, and of always
allowing a sufficient rate of duty to more than cover the difference between
the labor cost here and abroad. The well-being of the wage-worker, like
the well-being of the tiller of the soil, should be treated as an essential
in shaping our whole economic policy. There must never be any change which
will jeopardize the standard of comfort, the standard of wages of the American
wage-worker.

One way in which the readjustment sought can be reached is by reciprocity
treaties. It is greatly to be desired that such treaties may be adopted.
They can be used to widen our markets and to give a greater field for the
activities of our producers on the one hand, and on the other hand to secure
in practical shape the lowering of duties when they are no longer needed
for protection among our own people, or when the minimum of damage done
may be disregarded for the sake of the maximum of good accomplished. If
it prove impossible to ratify the pending treaties, and if there seem to
be no warrant for the endeavor to execute others, or to amend the pending
treaties so that they can be ratified, then the same end--to secure reciprocity--should
be met by direct legislation.

Wherever the tariff conditions are such that a needed change can not
with advantage be made by the application of the reciprocity idea, then
it can be made outright by a lowering of duties on a given product. If
possible, such change should be made only after the fullest consideration
by practical experts, who should approach the subject from a business standpoint,
having in view both the particular interests affected and the commercial
well-being of the people as a whole. The machinery for providing such careful
investigation can readily be supplied. The executive department has already
at its disposal methods of collecting facts and figures; and if the Congress
desires additional consideration to that which will be given the subject
by its own committees, then a commission of business experts can be appointed
whose duty it should be to recommend action by the Congress after a deliberate
and scientific examination of the various schedules as they are affected
by the changed and changing conditions. The unhurried and unbiased report
of this commission would show what changes should be made in the various
schedules, and how far these changes could go without also changing the
great prosperity which this country is now enjoying, or upsetting its fixed
economic policy.

The cases in which the tariff can produce a monopoly are so few as to
constitute an inconsiderable factor in the question; but of course if in
any case it be found that a given rate of duty does promote a monopoly
which works ill, no protectionist would object to such reduction of the
duty as would equalize competition.

In my judgment, the tariff on anthracite coal should be removed, and
anthracite put actually, where it now is nominally, on the free list. This
would have no effect at all save in crises; but in crises it might be of
service to the people.

Interest rates are a potent factor in business activity, and in order
that these rates may be equalized to meet the varying needs of the seasons
and of widely separated communities, and to prevent the recurrence of financial
stringencies which injuriously affect legitimate business, it is necessary
that there should be an element of elasticity in our monetary system. Banks
are the natural servants of commerce, and upon them should be placed, as
far as practicable, the burden of furnishing and maintaining a circulation
adequate to supply the needs of our diversified industries and of our domestic
and foreign commerce; and the issue of this should be so regulated that
a sufficient supply should be always available for the business interests
of the country.

It would be both unwise and unnecessary at this time to attempt to reconstruct
our financial system, which has been the growth of a century; but some
additional legislation is, I think, desirable. The mere outline of any
plan sufficiently comprehensive to meet these requirements would transgress
the appropriate limits of this communication. It is suggested, however,
that all future legislation on the subject should be with the view of encouraging
the use of such instrumentalities as will automatically supply every legitimate
demand of productive industries and of commerce, not only in the amount,
but in the character of circulation; and of making all kinds of money interchangeable,
and, at the will of the holder, convertible into the established gold standard.

I again call your attention to the need of passing a proper immigration
law, covering the points outlined in my Message to you at the first session
of the present Congress; substantially such a bill has already passed the
House.

How to secure fair treatment alike for labor and for capital, how to
hold in check the unscrupulous man, whether employer or employee, without
weakening individual initiative, without hampering and cramping the industrial
development of the country, is a problem fraught with great difficulties
and one which it is of the highest importance to solve on lines of sanity
and far-sighted common sense as well as of devotion to the right. This
is an era of federation and combination. Exactly as business men find they
must often work through corporations, and as it is a constant tendency
of these corporations to grow larger, so it is often necessary for laboring
men to work in federations, and these have become important factors of
modern industrial life. Both kinds of federation, capitalistic and labor,
can do much good, and as a necessary corollary they can both do evil. Opposition
to each kind of organization should take the form of opposition to whatever
is bad in the conduct of any given corporation or union--not of attacks
upon corporations as such nor upon unions as such; for some of the most
far-reaching beneficent work for our people has been accomplished through
both corporations and unions. Each must refrain from arbitrary or tyrannous
interference with the rights of others. Organized capital and organized
labor alike should remember that in the long run the interest of each must
be brought into harmony with the interest of the general public; and the
conduct of each must conform to the fundamental rules of obedience to the
law, of individual freedom, and of justice and fair dealing toward all.
Each should remember that in addition to power it must strive after the
realization of healthy, lofty, and generous ideals. Every employer, every
wage-worker, must be guaranteed his liberty and his right to do as he likes
with his property or his labor so long as he does not infringe upon the
rights of others. It is of the highest importance that employer and employee
alike should endeavor to appreciate each the viewpoint of the other and
the sure disaster that will come upon both in the long run if either grows
to take as habitual an attitude of sour hostility and distrust toward the
other. Few people deserve better of the country than those representatives
both of capital and labor--and there are many such--who work continually
to bring about a good understanding of this kind, based upon wisdom and
upon broad and kindly sympathy between employers and employed. Above all,
we need to remember that any kind of class animosity in the political world
is, if possible, even more wicked, even more destructive to national welfare,
than sectional, race, or religious animosity. We can get good government
only upon condition that we keep true to the principles upon which this
Nation was founded, and judge each man not as a part of a class, but upon
his individual merits. All that we have a right to ask of any man, rich
or poor, whatever his creed, his occupation, his birthplace, or his residence,
is that he shall act well and honorably by his neighbor and by, his country.
We are neither for the rich man as such nor for the poor man as such; we
are for the upright man, rich or poor. So far as the constitutional powers
of the National Government touch these matters of general and vital moment
to the Nation, they should be exercised in conformity with the principles
above set forth.

It is earnestly hoped that a secretary of commerce may be created, with
a seat in the Cabinet. The rapid multiplication of questions affecting
labor and capital, the growth and complexity of the organizations through
which both labor and capital now find expression, the steady tendency toward
the employment of capital in huge corporations, and the wonderful strides
of this country toward leadership in the international business world justify
an urgent demand for the creation of such a position. Substantially all
the leading commercial bodies in this country have united in requesting
its creation. It is desirable that some such measure as that which has
already passed the Senate be enacted into law. The creation of such a department
would in itself be an advance toward dealing with and exercising supervision
over the whole subject of the great corporations doing an interstate business;
and with this end in view, the Congress should endow the department with
large powers, which could be increased as experience might show the need.

I hope soon to submit to the Senate a reciprocity treaty with Cuba.
On May 20 last the United States kept its promise to the island by formally
vacating Cuban soil and turning Cuba over to those whom her own people
had chosen as the first officials of the new Republic.

Cuba lies at our doors, and whatever affects her for good or for ill
affects us also. So much have our people felt this that in the Platt amendment
we definitely took the ground that Cuba must hereafter have closer political
relations with us than with any other power. Thus in a sense Cuba has become
a part of our international political system. This makes it necessary that
in return she should be given some of the benefits of becoming part of
our economic system. It is, from our own standpoint, a short-sighted and
mischievous policy to fail to recognize this need. Moreover, it is unworthy
of a mighty and generous nation, itself the greatest and most successful
republic in history, to refuse to stretch out a helping hand to a young
and weak sister republic just entering upon its career of independence.
We should always fearlessly insist upon our rights in the face of the strong,
and we should with ungrudging hand do our generous duty by the weak. I
urge the adoption of reciprocity with Cuba not only because it is eminently
for our own interests to control the Cuban market and by every means to
foster our supremacy in the tropical lands and waters south of us, but
also because we, of of the giant republic of the north, should make all
our sister nations of the American Continent feel that whenever they will
permit it we desire to show ourselves disinterestedly and effectively their
friend.

A convention with Great Britain has been concluded, which will be at
once laid before the Senate for ratification, providing for reciprocal
trade arrangements between the United States and Newfoundland on substantially
the lines of the convention formerly negotiated by the Secretary of State,
Mr. Blaine. I believe reciprocal trade relations will be greatly to the
advantage of both countries.

As civilization grows warfare becomes less and less the normal condition
of foreign relations. The last century has seen a marked diminution of
wars between civilized powers; wars with uncivilized powers are largely
mere matters of international police duty, essential for, the welfare of
the world. Wherever possible, arbitration or some similar method should
be employed in lieu of war to settle difficulties between civilized nations,
although as yet the world has not progressed sufficiently to render it
possible, or necessarily desirable, to invoke arbitration in every case.
The formation of the international tribunal which sits at The Hague is
an event of good omen from which great consequences for the welfare of
all mankind may flow. It is far better, where possible, to invoke such
a permanent tribunal than to create special arbitrators for a given purpose.

It is a matter of sincere congratulation to our country that the United
States and Mexico should have been the first to use the good offices of
The Hague Court. This was done last summer with most satisfactory results
in the case of a claim at issue between us and our sister Republic. It
is earnestly to be hoped that this first case will serve as a precedent
for others, in which not only the United States but foreign nations may
take advantage of the machinery already in existence at The Hague.

I commend to the favorable consideration of the Congress the Hawaiian
fire claims, which were the subject of careful investigation during the
last session.

The Congress has wisely provided that we shall build at once an isthmian
canal, if possible at Panama. The Attorney-General reports that we can
undoubtedly acquire good title from the French Panama Canal Company. Negotiations
are now pending with Colombia to secure her assent to our building the
canal. This canal will be one of the greatest engineering feats of the
twentieth century; a greater engineering feat than has yet been accomplished
during the history of mankind. The work should be carried out as a continuing
policy without regard to change of Administration; and it should be begun
under circumstances which will make it a matter of pride for all Administrations
to continue the policy.

The canal will be of great benefit to America, and of importance to
all the world. It will be of advantage to us industrially and also as improving
our military position. It will be of advantage to the countries of tropical
America. It is earnestly to be hoped that all of these countries will do
as some of them have already done with signal success, and will invite
to their shores commerce and improve their material conditions by recognizing
that stability and order are the prerequisites of successful development.
No independent nation in America need have the slightest fear of aggression
from the United States. It behoves each one to maintain order within its
own borders and to discharge its just obligations to foreigners. When this
is done, they can rest assured that, be they strong or weak, they have
nothing to dread from outside interference. More and more the increasing
interdependence and complexity of international political and economic
relations render it incumbent on all civilized and orderly powers to insist
on the proper policing of the world.

During the fall of 1901 a communication was addressed to the Secretary
of State, asking whether permission would be granted by the President to
a corporation to lay a cable from a point on the California coast to the
Philippine Islands by way of Hawaii. A statement of conditions or terms
upon which such corporation would undertake to lay and operate a cable
was volunteered.

Inasmuch as the Congress was shortly to convene, and Pacific-cable legislation
had been the subject of consideration by the Congress for several years,
it seemed to me wise to defer action upon the application until the Congress
had first an opportunity to act. The Congress adjourned without taking
any action, leaving the matter in exactly the same condition in which it
stood when the Congress convened.

Meanwhile it appears that the Commercial Pacific Cable Company had promptly
proceeded with preparations for laying its cable. It also made application
to the President for access to and use of soundings taken by the U. S.
S. Nero, for the purpose of discovering a practicable route for a trans-Pacific
cable, the company urging that with access to these soundings it could
complete its cable much sooner than if it were required to take soundings
upon its own account. Pending consideration of this subject, it appeared
important and desirable to attach certain conditions to the permission
to examine and use the soundings, if it should be granted.

In consequence of this solicitation of the cable company, certain conditions
were formulated, upon which the President was willing to allow access to
these soundings and to consent to the landing and laying of the cable,
subject to any alterations or additions thereto imposed by the Congress.
This was deemed proper, especially as it was clear that a cable connection
of some kind with China, a foreign country, was a part of the company's
plan. This course was, moreover, in accordance with a line of precedents,
including President Grant's action in the case of the first French cable,
explained to the Congress in his Annual Message of December, 1875, and
the instance occurring in 1879 of the second French cable from Brest to
St. Pierre, with a branch to Cape Cod.

These conditions prescribed, among other things, a maximum rate for
commercial messages and that the company should construct a line from the
Philippine Islands to China, there being at present, as is well known,
a British line from Manila to Hongkong.

The representatives of the cable company kept these conditions long
under consideration, continuing, in the meantime, to prepare for laying
the cable. They have, however, at length acceded to them, and an all-American
line between our Pacific coast and the Chinese Empire, by way of Honolulu
and the Philippine Islands, is thus provided for, and is expected within
a few months to be ready for business.

Among the conditions is one reserving the power of the Congress to modify
or repeal any or all of them. A copy of the conditions is herewith transmitted.

Of Porto Rico it is only necessary to say that the prosperity of the
island and the wisdom with which it has been governed have been such as
to make it serve as an example of all that is best in insular administration.

On July 4 last, on the one hundred and twenty-sixth anniversary of the
declaration of our independence, peace and amnesty were promulgated in
the Philippine Islands. Some trouble has since from time to time threatened
with the Mohammedan Moros, but with the late insurrectionary Filipinos
the war has entirely ceased. Civil government has now been introduced.
Not only does each Filipino enjoy such rights to life, liberty, and the
pursuit of happiness as he has never before known during the recorded history
of the islands, but the people taken as a whole now enjoy a measure of
self-government greater than that granted to any other Orientals by any
foreign power and greater than that enjoyed by any other Orientals under
their own governments, save the Japanese alone. We have not gone too far
in granting these rights of liberty and self-government; but we have certainly
gone to the limit that in the interests of the Philippine people themselves
it was wise or just to go. To hurry matters, to go faster than we are now
going, would entail calamity on the people of the islands. No policy ever
entered into by the American people has vindicated itself in more signal
manner than the policy of holding the Philippines. The triumph of our arms,
above all the triumph of our laws and principles, has come sooner than
we had any right to expect. Too much praise can not be given to the Army
for what it has done in the Philippines both in warfare and from an administrative
standpoint in preparing the way for civil government; and similar credit
belongs to the civil authorities for the way in which they have planted
the seeds of self-government in the ground thus made ready for them. The
courage, the unflinching endurance, the high soldierly efficiency; and
the general kind-heartedness and humanity of our troops have been strikingly
manifested. There now remain only some fifteen thousand troops in the islands.
All told, over one hundred thousand have been sent there. Of course, there
have been individual instances of wrongdoing among them. They warred under
fearful difficulties of climate and surroundings; and under the strain
of the terrible provocations which they continually received from their
foes, occasional instances of cruel retaliation occurred. Every effort
has been made to prevent such cruelties, and finally these efforts have
been completely successful. Every effort has also been made to detect and
punish the wrongdoers. After making all allowance for these misdeeds, it
remains true that few indeed have been the instances in which war has been
waged by a civilized power against semicivilized or barbarous forces where
there has been so little wrongdoing by the victors as in the Philippine
Islands. On the other hand, the amount of difficult, important, and beneficent
work which has been done is well-nigh incalculable.

Taking the work of the Army and the civil authorities together, it may
be questioned whether anywhere else in modern times the world has seen
a better example of real constructive statesmanship than our people have
given in the Philippine Islands. High praise should also be given those
Filipinos, in the aggregate very numerous, who have accepted the new conditions
and joined with our representatives to work with hearty good will for the
welfare of the islands.

The Army has been reduced to the minimum allowed by law. It is very
small for the size of the Nation, and most certainly should be kept at
the highest point of efficiency. The senior officers are given scant chance
under ordinary conditions to exercise commands commensurate with their
rank, under circumstances which would fit them to do their duty in time
of actual war. A system of maneuvering our Army in bodies of some little
size has been begun and should be steadily continued. Without such maneuvers
it is folly to expect that in the event of hostilities with any serious
foe even a small army corps could be handled to advantage. Both our officers
and enlisted men are such that we can take hearty pride in them. No better
material can be found. But they must be thoroughly trained, both as individuals
and in the mass. The marksmanship of the men must receive special attention.
In the circumstances of modern warfare the man must act far more on his
own individual responsibility than ever before, and the high individual
efficiency of the unit is of the utmost importance. Formerly this unit
was the regiment; it is now not the regiment, not even the troop or company;
it is the individual soldier. Every effort must be made to develop every
workmanlike and soldierly quality in both the officer and the enlisted
man.

I urgently call your attention to the need of passing a bill providing
for a general staff and for the reorganization of the supply departments
on the lines of the bill proposed by the Secretary of War last year. When
the young officers enter the Army from West Point they probably stand above
their compeers in any other military service. Every effort should be made,
by training, by reward of merit, by scrutiny into their careers and capacity,
to keep them of the same high relative excellence throughout their careers.
Messages and Papers of the Presidents, Theodore Roosevelt, vol. 9,
p.6761 - p.6762
The measure providing for the reorganization of the militia system
and for securing the highest efficiency in the National Guard, which has
already passed the House, should receive prompt attention and action. It
is of great importance that the relation of the National Guard to the militia
and volunteer forces of the United States should be defined, and that in
place of our present obsolete laws a practical and efficient system should
be adopted.

Provision should be made to enable the Secretary of War to keep cavalry
and artillery horses, worn-out in long performance of duty. Such horses
fetch but a trifle when sold; and rather than turn them out to the misery
awaiting them when thus disposed of, it would be better to employ them
at light work around the posts, and when necessary to put them painlessly
to death.

For the first time in our history naval maneuvers on a large scale are
being held under the immediate command of the Admiral of the Navy. Constantly
increasing attention is being paid to the gunnery of the Navy, but it is
yet far from what it should be. I earnestly urge that the increase asked
for by the Secretary of the Navy in the appropriation for improving the
markmanship be granted. In battle the only shots that count are the shots
that hit. It is necessary to provide ample funds for practice with the
great guns in time of peace. These funds must provide not only for the
purchase of projectiles, but for allowances for prizes to encourage the
gun crews, and especially the gun pointers, and for perfecting an intelligent
system under which alone it is possible to get good practice.

There should be no halt in the work of building up the Navy, providing
every year additional fighting craft. We are a very rich country, vast
in extent of territory and great in population; a country, moreover, which
has an Army diminutive indeed when compared with that of any other first-class
power. We have deliberately made our own certain foreign policies which
demand the possession of a first-class navy. The isthmian canal will greatly
increase the efficiency of our Navy if the Navy is of sufficient size;
but if we have an inadequate navy, then the building of the canal would
be merely giving a hostage to any power of superior strength. The Monroe
Doctrine should be treated as the cardinal feature of American foreign
policy; but it would be worse than idle to assert it unless we intended
to back it up, and it can be backed up only by a thoroughly good navy.
A good navy is not a provocative of war. It is the surest guaranty of peace.

Each individual unit of our Navy should be the most efficient of its
kind as regards both material and personnel that is to be found in the
world. I call your special attention to the need of providing for the manning
of the ships. Serious trouble threatens us if we can not do better than
we are now doing as regards securing the services of a sufficient number
of the highest type of sailormen, of sea mechanics. The veteran seamen
of our war ships are of as high a type as can be found in any navy which
rides the waters of the world; they are unsurpassed in daring, in resolution,
in readiness, in thorough knowledge of their profession. They deserve every
consideration that can be shown them. But there are not enough of them.
It is no more possible to improvise a crew than it is possible to improvise
a war ship. To build the finest ship, with the deadliest battery, and to
send it afloat with a raw crew, no matter how brave they were individually,
would be to insure disaster if a foe of average capacity were encountered.
Neither ships nor men can be improvised when war has begun.

We need a thousand additional officers in order to properly man the
ships now provided for and under construction. The classes at the Naval
School at Annapolis should be greatly enlarged. At the same time that we
thus add the officers where we need them, we should facilitate the retirement
of those at the head of the list whose usefulness has become impaired.
Promotion must be fostered if the service is to be kept efficient.

The lamentable scarcity of officers, and the large number of recruits
and of unskilled men necessarily put aboard the new vessels as they have
been commissioned, has thrown upon our officers, and especially on the
lieutenants and junior grades, unusual labor and fatigue and has gravely
strained their powers of endurance. Nor is there sign of any immediate
let-up in this strain. It must continue for some time longer, until more
officers are graduated from Annapolis, and until the recruits become trained
and skillful in their duties. In these difficulties incident upon the development
of our war fleet the conduct of all our officers has been creditable to
the service, and the lieutenants and junior grades in particular have displayed
an ability and a steadfast cheerfulness which entitles them to the ungrudging
thanks of all who realize the disheartening trials and fatigues to which
they are of necessity subjected.

There is not a cloud on the horizon at present. There seems not the
slightest chance of trouble with a foreign power. We most earnestly hope
that this state of things may continue; and the way to insure its continuance
is to provide for a thoroughly efficient navy. The refusal to maintain
such a navy would invite trouble, and if trouble came would insure disaster.
Fatuous self-complacency or vanity, or short-sightedness in refusing to
prepare for danger, is both foolish and wicked in such a nation as ours;
and past experience has shown that such fatuity in refusing to recognize
or prepare for any crisis in advance is usually succeeded by a mad panic
of hysterical fear once the crisis has actually arrived.

The striking increase in the revenues of the Post-Office Department
shows clearly the prosperity of our people and the increasing activity
of the business of the country.

The receipts of the Post-Office Department for the fiscal year ending
June 30 last amounted to $121,848,047.26, an increase of $10,216,853.87
over the preceding year, the largest increase known in the history of the
postal service. The magnitude of this increase will best appear from the
fact that the entire postal receipts for the year 1860 amounted to but
$8,518,067.

Rural free-delivery service is no longer in the experimental stage;
it has become a fixed policy. The results following its introduction have
fully justified the Congress in the large appropriations made for its establishment
and extension. The average yearly increase in post-office receipts in the
rural districts of the country is about two per cent. We are now able,
by actual results, to show that where rural free-delivery service has been
established to such an extent as to enable us to make comparisons the yearly
increase has been upward of ten per cent.

On November 1, 1902, 11,650 rural free-delivery routes had been established
and were in operation, covering about one-third of the territory of the
United States available for rural free-delivery service. There are now
awaiting the action of the Department petitions and applications for the
establishment of 10,748 additional routes. This shows conclusively the
want which the establishment of the service has met and the need of further
extending it as rapidly as possible. It is justified both by the financial
results and by the practical benefits to our rural population; it brings
the men who live on the soil into close relations with the active business
world; it keeps the farmer in daily touch with the markets; it is a potential
educational force; it enhances the value of farm property, makes farm life
far pleasanter and less isolated, and will do much to check the undesirable
current from country to city.

It is to be hoped that the Congress will make liberal appropriations
for the continuance of the service already established and for its further
extension.

Few subjects of more importance have been taken up by the Congress in
recent years than the inauguration of the system of nationally-aided irrigation
for the arid regions of the far West. A good beginning therein has been
made. Now that this policy of national irrigation has been adopted, the
need of thorough and scientific forest protection will grow more rapidly
than ever throughout the public-land States.

Legislation should be provided for the protection of the game, and the
wild creatures generally, on the forest reserves. The senseless slaughter
of game, which can by judicious protection be permanently preserved on
our national reserves for the people as a whole, should be stopped at once.
It is, for instance, a serious count against our national good sense to
permit the present practice of butchering off such a stately and beautiful
creature as the elk for its antlers or tusks.

So far as they are available for agriculture, and to whatever
extent they may be reclaimed under the national irrigation law, the remaining
public lands should be held rigidly for the home builder, the settler who
lives on his land, and for no one else. In their actual use the desert-land
law, the timber and stone law, and the commutation clause of the homestead
law have been so perverted from the intention with which they were enacted
as to permit the acquisition of large areas of the public domain for other
than actual settlers and the consequent prevention of settlement. Moreover,
the approaching exhaustion of the public ranges has of late led to much
discussion as to the best manner of using these public lands in the West
which are suitable chiefly or only for grazing. The sound and steady development
of the West depends upon the building up of homes therein. Much of our
prosperity as a nation has been due to the operation of the homestead law.
On the other hand, we should recognize the fact that in the grazing region
the man who corresponds to the homesteader may be unable to settle permanently
if only allowed to use the same amount of pasture land that his brother,
the homesteader, is allowed to use of arable land. One hundred and sixty
acres of fairly rich and well-watered soil, or a much smaller amount of
irrigated land, may keep a family in plenty, whereas no one could get a
living from one hundred and sixty acres of dry pasture land capable of
supporting at the outside only one head of cattle to every ten acres. In
the past great tracts of the public domain have been fenced in by persons
having no title thereto, in direct defiance of the law forbidding the maintenance
or construction of any such unlawful inclosure of public land. For various
reasons there has been little interference with such inclosures in the
past, but ample notice has now been given the trespassers, and all the
resources at the command of the Government will hereafter be used to put
a stop to such trespassing.

In view of the capital importance of these matters, I commend them to
the earnest consideration of the Congress, and if the Congress finds difficulty
in dealing with them from lack of thorough knowledge of the subject, I
recommend that provision be made for a commission of experts specially
to investigate and report upon the complicated questions involved.

I especially urge upon the Congress the need of wise legislation for
Alaska. It is not to our credit as a nation that Alaska, which has been
ours for thirty-five years, should still have as poor a system Of laws
as is the case. No country has a more valuable possession-- in mineral
wealth, in fisheries, furs, forests, and also in land available for certain
kinds of farming and stockgrowing. It is a territory of great size and
varied resources, well fitted to support a large permanent population.
Alaska needs a good land law and such provisions for homesteads and pre-emptions
as will encourage permanent settlement. We should shape legislation with
a view not to the exploiting and abandoning of the territory, but to the
building up of homes therein. The land laws should be liberal in type,
so as to hold out inducements to the actual settler whom we most desire
to see take possession of the country. The forests of Alaska should be
protected, and, as a secondary but still important matter, the game also,
and at the same time it is imperative that the settlers should be allowed
to cut timber, under proper regulations, for their own use. Laws should
be enacted to protect the Alaskan salmon fisheries against the greed which
would destroy them. They should be preserved as a permanent industry and
food supply. Their management and control should be turned over to the
Commission of Fish and Fisheries. Alaska should have a Delegate in the
Congress. It would be well if a Congressional committee could visit Alaska
and investigate its needs on the ground.

In dealing with the Indians our aim should be their ultimate absorption
into the body of our people. But in many cases this absorption must and
should be very slow. In portions of the Indian Territory the mixture of
blood has gone on at the same time with progress in wealth and education,
so that there are plenty of men with varying degrees of purity of Indian
blood who are absolutely indistinguishable in point of social, political,
and economic ability from their white associates. There are other tribes
which have as yet made no perceptible advance toward such equality. To
try to force such tribes too fast is to prevent their going forward at
all. Moreover, the tribes live under widely different conditions. Where
a tribe has made considerable advance and lives on fertile farming soil
it is possible to allot the members lands in severalty much as is the case
with white settlers. There are other tribes where such a course is not
desirable. On the arid prairie lands the effort should be to induce the
Indians to lead pastoral rather than agricultural lives, and to permit
them to settle in villages rather than to force them into isolation.

The large Indian schools situated remote from any Indian reservation
do a special and peculiar work of great importance. But, excellent though
these are, an immense amount of additional work must be done on the reservations
themselves among the old, and above all among the young, Indians.

The first and most important step toward the absorption of the Indian
is to teach him to earn his living; yet it is not necessarily to be assumed
that in each community all Indians must become either tillers of the soil
or stock raisers. Their industries may properly be diversified, and those
who show special desire or adaptability for industrial or even commercial
pursuits should be encouraged so far as practicable to follow out each
his own bent.

Every effort should be made to develop the Indian along the lines of
natural aptitude, and to encourage the existing native industries peculiar
to certain tribes, such as the various kinds of basket weaving, canoe building,
smith work, and blanket work. Above all, the Indian boys and girls should
be given confident command of colloquial English, and should ordinarily
be prepared for a vigorous struggle with the conditions under which their
people live, rather than for immediate absorption into some more highly
developed community.

The officials who represent the Government in dealing with the Indians
work under hard conditions, and also under conditions which render it easy
to do wrong and very difficult to detect wrong. Consequently they should
be amply paid on the one hand, and on the other hand a particularly high
standard of conduct should be demanded from them, and where misconduct
can be proved the punishment should be exemplary.

In no department of governmental work in recent years has there been
greater success than in that of giving scientific aid to the farming population,
thereby showing them how most efficiently to help themselves. There is
no need of insisting upon its importance, for the welfare of the farmer
is fundamentally necessary to the welfare of the Republic as a whole. In
addition to such work as quarantine against animal and vegetable plagues,
and warring against them when here introduced, much efficient help has
been rendered to the farmer by the introduction of new plants specially
fitted for cultivation under the peculiar conditions existing in different
portions of the country. New cereals have been established in the semi-arid
West. For instance, the practicability of producing the best types of macaroni
wheats in regions of an annual rainfall of only ten inches or thereabouts
has been conclusively demonstrated. Through the introduction of new rices
in Louisiana and Texas the production of rice in this country has been
made to about equal the home demand. In the South-west the possibility
of regrassing overstocked range lands has been demonstrated; in the North
many new forage crops have been introduced, while in the East it has been
shown that some of our choicest fruits can be stored and shipped in such
a way as to find a profitable market abroad.

I again recommend to the favorable consideration of the Congress the
plans of the Smithsonian Institution for making the Museum under its charge
worthy of the Nation, and for preserving at the National Capital not only
records of the vanishing races of men but of the animals of this continent
which, like the buffalo, will soon become extinct unless specimens from
which their representatives may be renewed are sought in their native regions
and maintained there in safety.

The District of Columbia is the only part of our territory in which
the National Government exercises local or municipal functions, and where
in consequence the Government has a free hand in reference to certain types
of social and economic legislation which must be essentially local or municipal
in their character. The Government should see to it, for instance, that
the hygienic and sanitary legislation affecting Washington is of a high
character. The evils of slum dwellings, whether in the shape of crowded
and congested tenement-house districts or of the back-alley type, should
never be permitted to grow up in Washington. The city should be a model
in every respect for all the cities of the country. The charitable and
correctional systems of the District should receive consideration at the
hands of the Congress to the end that they may embody the results of the
most advanced thought in these fields. Moreover, while Washington is not
a great industrial city, there is some industrialism here, and our labor
legislation, while it would not be important in itself, might be made a
model for the rest of the Nation. We should pass, for instance, a wise
employer's-liability act for the District of Columbia, and we need such
an act in our navy-yards. Railroad companies in the District ought to be
required by law to block their frogs.

The safety-appliance law, for the better protection of the lives and
limbs of railway employees, which was passed in 1893, went into full effect
on August 1, 1901. It has resulted in averting thousands of casualties.
Experience shows, however, the necessity of additional legislation to perfect
this law. A bill to provide for this passed the Senate at the last session.
It is to be hoped that some such measure may now be enacted into law.

There is a growing tendency to provide for the publication of masses
of documents for which there is no public demand and for the printing of
which there is no real necessity. Large numbers of volumes are turned out
by the Government printing presses for which there is no justification.
Nothing should be printed by any of the Departments unless it contains
something of permanent value, and the Congress could with advantage cut
down very materially on all the printing which it has now become customary
to provide. The excessive cost of Government printing is a strong argument
against the position of those who are inclined on abstract grounds to advocate
the Government's doing any work which can with propriety be left in private
hands.

Gratifying progress has been made during the year in the extension of
the merit system of making appointments in the Government service. It should
be extended by law to the District of Columbia. It is much to be desired
that our consular system be established by law on a basis providing for
appointment and promotion only in consequence of proved fitness.

Through a wise provision of the Congress at its last session the White
House, which had become disfigured by incongruous additions and changes,
has now been restored to what it was planned to be by Washington. In making
the restorations the utmost care has been exercised to come as near as
possible to the early plans and to supplement these plans by a careful
study of such buildings as that of the University of Virginia, which was
built by Jefferson. The White House is the property of the Nation, and
so far as is compatible with living therein it should be kept as it originally
was, for the same. reasons that we keep Mount Vernon as it originally was.
The stately simplicity of its architecture is an expression of the character
of the period in which it was built, and is in accord with the purposes
it was designed to serve. It is a good thing to preserve such buildings
as historic monuments which keep alive our sense of continuity with the
Nation's past.

The reports of the several Executive Departments are submitted to the
Congress with this communication.